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First portal data released since Covid-19 outbreak shows the expected reduction in new claims submitted in March 2020 and whiplash reform delayed to April 2021

As foretold in last month's update, the first statistical evidence of a downturn in claims post Covid has been confirmed in the Claims Portal data released for March. As UK road travel has apparently fallen to 1955 levels, and the Government graphs on mobility are published daily showing huge reductions in mobility, this is not exactly a surprise:

 

We have summarised the changes further below with the usual graphs.

 

In addition, we have now had confirmation from the Lord Chancellor that the whiplash reforms will be delayed to April 2021, which again had been expected since our last strategic update. It is good to see that the MOJ has made the announcement at a fairly early stage so that all involved in the industry can focus their efforts on issues around Covid-19 that currently dominate the legal and insurance landscape.

Covid-19

Industry developments

 

By and large, with just a few exceptions, the industry has adapted to court closures and remote working with collaboration between claimant and defendant representatives.

 

As well as FOIL and APIL signing up to best practice protocols, it was announced this week that the protocol developed between claimant firm Thompsons and the ABI, has also been extended until 20 May. As at 20 April, a total of 335 law firms and 105 Insurance companies have signed up.

 

Whereas the FOIL protocol understandably deals with issues around conduct between legal representatives, the ABI agreement is based around an extension to limitation periods and, where requested, defences with mandatory escalation points when such extensions are not agreed.

 

MedCo has temporarily relaxed the restriction on remote examinations for medico-legal reports, to allow remote examinations (but not by telephone). A similar approach is being taken in relation to physiotherapy treatment which will need to be even more closely monitored for any abuse.

 

Court and procedural updates

 

Central guidance

 

The initial guidance from the Lord Chief Justice, very much encouraged attempting to find a way through and to ensure that hearings could go ahead remotely. This was of course tempered with an acknowledgment that "it is not business as usual", and that it would not always be possible to attend hearings remotely. The most recent update (pdf) from the senior judiciary takes stock of the experience to date, noting examples of practical issues that have emerged, such as the occasional bad behaviour of participants, the perception of the hearing experience for lay parties, and even that using technology to conduct hearings can be unusually tiring. Ultimately, they recognise that "doing as much as possible remotely does not mean, and cannot mean, trying to do everything remotely".

 

Alongside this guidance, the Civil Procedure Rule Committee, albeit perhaps later than hoped, began to issue pandemic related Practice Directions, the most relevant of which for insurance litigation is PD51Z, which increases the directions buffer from 28 days to 56 days without requiring the permission of the court. It also highlights that "the court will take into account the impact of the Covid-19 pandemic when considering applications for the extension of time for compliance with directions, the adjournment of hearings, and applications for relief from sanctions", an important provision to bear in mind both when dealing with opponents and when making applications to the court.

 

Also, HMCTS has been providing helpful daily updates, including information such as the courts' listing priorities, and procedures in the higher courts, along with a tracker showing which courts are open, staffed, or temporarily closed.

 

Caselaw

 

The approach of the judiciary has over the past month reflected both the central guidance and the pragmatism advocated. Remote hearings have been ordered in large and complex cases such as the banking case of National Bank of Kazakhstan v Bank of New York Mellon, and the insolvency case of Re One Blackfriars Ltd, whereas a 15 day Family Court hearing involving the well-being of a child has been deemed unsuitable for remote hearing. In Heineken Supply Chain BV v Anheuser-Busch Inbev SA, where an application for an extension of time in relation to evidence in the run-up to trial would ordinarily be hard to justify, in current circumstances a modest extension of time was considered appropriate in accordance with the guidance, albeit with the trial window remaining in place.

 

Local guidance and DWF's experience

 

The senior judiciary recently explained that they "took the view that rather than issuing detailed national guidance, the better course was to leave the decision-making as to which court cases should be conducted remotely to judges with the assistance of the… DCJs."

 

Perhaps unsurprisingly this approach has had varying degrees of success. Some courts have issued detailed and helpful guidance for the handling of different types of hearing such as CCMCs, Stage 3 hearings, and infant approvals; they have been clear about the blanket adjournment of fast track and small claims track hearings; and they have made their own provisions on extensions of time and on practical issues such as electronic signatures. Unfortunately, other courts have given no guidance at all, and are often uncontactable, leaving parties not knowing until the last minute whether hearings have been adjourned, or worse that they are indeed going ahead remotely.

 

Our own experience confirms this inconsistency across the courts, for example with fast track trials deemed suitable for remote hearings and small claims track hearings unsuitable; or small claims track hearings capable of being concluded on paper if the parties agree, but otherwise adjourned altogether. What has emerged though is the need for cases to be properly reviewed before final hearing so that parties are clear on whether they need to be settled, adjourned or dealt with by remote hearing. If the latter, parties need to be fully prepared for the remote hearing procedures and the expectations around evidence and bundles, thinking also about both the advantages and disadvantages that come with the removal of live, face-to-face evidence and submissions.

 

Whiplash reforms update

The main speculation over recent months was whether the new date would be January or April 2021 and we now have our answer. Preparing for the reforms will be challenging enough, but trying to do that remotely in the current environment was undoubtedly a bridge too far. An implementation date of April 2021 means we should have a longer period between sight of the new Rules and Protocols and implementation, and that can only be a good thing.

 

In our update last month we set out the list of outstanding issues that needed to be completed, if the reforms were to go live in August of this year and it's probably safe to assume that the "to do list" largely remains untouched. The only other update this month from the MIB has been to report that it had successfully completed some scheduled website maintenance of the Official Injury Claim website.

 

The CPRC's next formal meeting is an open virtual meeting on the 15th of May and the indicative agenda includes "Whiplash; a discussion topic concerning CPR drafting generally “rules -v- PDs”. We shall have to wait and see whether any progress has been made although understandably the focus has been on Covid related issues such as the new practice direction and consideration over extensions to the current Protocols in the light of the present situation.

 

One can also expect a delay to any extension of the fixed costs regime. In fact the only reform on the horizon that may in fact be a beneficiary of the current crisis is the development of the on-line court, as the Judiciary and Court services' eyes are opened up to the art of the possible.

 

Portal Statistics

New RTA claims

 

New RTA claims submitted in March 2020 amounted to 48,517, a 13% decrease on the previous month and a 16.4% drop when taken against the same period in 2019. Bear in mind that the previous month was February, which is historically low given the number of working days in the month and March is historically high. Bear in mind the vehicle miles travelled is based on rolling annual trends up to December 2019 and is not due to be updated until June 2020, so doesn’t yet show the downturn indicated in the government analysis set out in the introduction.

 



To put that into context, it is the second lowest figure on record (only December 2018 is lower for CNF submissions) and the lowest ever for number of claims submitted per business day, 2,205. We suspect however, that March will not hold this record for long!


The rolling 12 month figure has also taken a hit as below:

 

New Casualty Claims

 

There was a similar picture in new EL and PL claims submitted via the Portal in March

 

New EL accident claims

 

There were 3,213 new EL accident claims in March 2020, a decrease of 11.8% on the previous month and 17.3% on the same month in 2019. With many businesses closed, further significant drops can be expected for April 2020 when the figures come through.

 

New PL Claims

 

New PL claims submitted in March 2020 totalled 4,064, a drop of 10.3% against the previous month and down 15.9% against the same period in 2019.

 

EL Disease claims also recorded a significant fall to 327 new claims, a 10.7% drop on the prior month and a 26.4% drop on the same month in 2019. The graph below demonstrate the reductions outside RTA:

 

 

The picture is less marked on the cumulative graph as there was already a downward trend and the EL and PL portals are more susceptible to fairly large percentage swings in the numbers of CNFs:   



PSLA figures and Stage 3 Usage

 

RTA PSLA figures remain static. The average settlement figure was £2,823 during March 2020, a rise of 0.1% on the previous month. Anecdotally there has been an indication that more claims are settling which would be expected initially in the current environment, but any reduction in general damages has not played out in the March data.

 

EL accident PSLA rose this month to £4,514, an increase of 1.6%. PL also rose, by 3.2% to an average of £4,469. EL disease saw a significant fall of 20.7% to £4,229 but with so few cases going through the portal the odd one or two higher quantum settlements can skew the figures.

 

The position on new Court Packs is interesting as there were 5,240 new CPPs in March 2020, which is a substantial increase on the previous month. This could be for non-Covid reasons but one theory is that Claimant Solicitors have been asking employees to get the packs issued for vital turnover. Also, with less new claims to handle it would leave more fee earner time free to focus on the Court Packs.

 

 

 

Retention rates and other items

 

Retention rates fell considerably in March as you might expect. Partly this will simply be due to the way retention is calculated and the much lower than normal number of CNF's in the month. It is also likely that claims handling was affected in the last few weeks of March leading to an increase in portal drop outs from missed time limits

 

RTA retention fell below 40% for the first time in quite a while and there was a significant drop in all other areas as demonstrated by the following graph:-

 



The breakdown of concluded claims reflects little overall change in the proportions of claims settling in the month. 

 

 

The retention rates should stabilise in the following months as the industry adapts to remote working practices – we will know the picture better when April's figures are published.

 

After a number of months with relatively stable claims volumes and overall Portal trends, it has suddenly become very interesting again. Six months ago we might have thought that interest would be due to implementation of the whiplash reforms, nobody predicted a global pandemic having a much more seismic effect on the industry.

 

 

Contacts

Nigel Teasdale

Partner, Head of Motor & Fraud
Insurance
M +44 7752 709114

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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